No More Solyndras

Groups Call on DOE to Force Public Release of Details on Delays and 12 Secret Cost Overruns at Vogtle Reactors

With More than
15 Times the Solyndra Loan Guarantee on the Line, U.S. Taxpayers Being Kept in
the Dark About Huge Vogtle Risks; Nine Groups Cite NRC Law Violation in Going
to Court to Block Vogtle Licensing.

WASHINGTON, D.C. – February 16, 2012 –If you are a taxpayer who liked
the less than half a billion dollar Solyndra federal loan guarantee debacle,
you will love the $8.33 billion loan
guarantee to the even riskier Vogtle nuclear reactor project licensed last week
by the Nuclear Regulatory Commission (NRC).

Concerned organizations are warning that Southern Company
is deliberately keeping U.S. taxpayers in the dark by covering up the details
of 12 sizeable construction “change order” requests that are expected to add
major delays and cost overruns to the controversial reactor project. The
secret cost overruns are discussed in a censored report from late 2011 by the independent Vogtle construction monitor, Dr. William
Jacobs, who is a veteran nuclear industry engineer. (See details below.) Much of Jacob’s testimony was redacted by the
utility in the attempt to keep the troubling information from the public,
including the U.S. taxpayers who will be left holding the bag if Southern
Company defaults on the federal loan guarantee.

The groups are calling on the U.S. Department of
Energy (DOE) to insist on full disclosure of the Vogtle delays and cost
overruns before the federal agency moves ahead with a massive $8.33 billion
taxpayer-backed federal loan guarantee that will be 15 times what was lost in
the Solyndra debacle. And Vogtle
does have a history that should trouble taxpayers worried about assuming
responsibility for the massive loan guarantee:
The original two reactors at the Georgia site
took almost 15 years to build, came in 1,200 percent over budget and resulted
in the largest rate hike at the time in Georgia.

Also today, nine groups went to U.S.
Court of Appeals for the District of Columbia Circuit to block the NRC license issued last week for the Vogtle reactors. The groups maintain that the NRC is violating federal law by
issuing the Vogtle license without considering important public safety and
environmental implications in the wake of the catastrophic Fukushima accident
in Japan. They will ask federal judges to order the NRC to prepare a new
environmental impact statement (EIS) for the proposed Vogtle reactors that
explains how cooling systems for the reactors and spent fuel storage pools will
be upgraded to protect against earthquakes, flooding and prolonged loss of
electric power to the site.

NRC Chairman Gregory
Jaczko dissented against the Vogtle license, expressing concerns about
significant changes that will be required based on the crippling Fukushima
accident. The lawsuit also challenges
the overall Westinghouse reactor design.

The organizations filing the lawsuit
today are: Friends of the Earth, the Southern Alliance for Clean Energy, Blue Ridge
Environmental Defense League, Center for a Sustainable Coast, Citizens Allied
for Safe Energy, Georgia Women’s Action for New Directions, North
Carolina Waste Awareness and Reduction Network, Nuclear Information and
Resource Service, and Nuclear Watch South.
The lawsuit text is available online at http://www.cleanenergy.org.

Jim Warren, executive director, NC WARN
said: “U.S. taxpayers need to brace themselves for some bad news if they are
put on the hook for any ill-considered ‘investment’ in the Vogtle reactors. Taxpayers
and Southern Company’s customers are
sitting ducks for serial cost overruns and soaring power bills unless
industry-captive federal and state regulators borrow some independence and make
these giant corporations bear the costs of their mistakes with Westinghouse’s
unproven, untested and unready AP1000 reactor design. DOE
owes it to Americans to get all the cost overrun and delay secrets out in the
open about Vogtle so that taxpayer and ratepayers know what they are in for.”

Commenting on today’s court filing, Mindy Goldstein, acting
director, Turner Environmental Law Clinic at Emory Law School said:
"The NRC decided to issue a license for Vogtle Units 3 and 4 before
it could consider the lessons learned from the Fukushima accident. This
is the exact approach the National Environmental Policy Act was designed to
prevent. Allowing construction of the new units to continue, without
first assessing the implications of the Fukushima accident, could have
significant and irreparable environmental and economic consequences."

Dr.
Arjun Makhijani, president, Institute for Energy and Environmental Research
said: “Not only are the costs of retrofits
likely to be lower if they are imposed at the start of construction rather than
later in the process, but an up-front accounting of the costs allows a
comparison with other alternative energy sources. Electricity from
natural gas combined cycle power plant is much cheaper than nuclear, for instance.
This is a very important consideration in the case of Vogtle.”

Lou Zeller, administrator, Blue Ridge Environmental Defense League
said: “The nuclear disaster in Japan
should have put the brakes on new plants in the United States. But an
aggressive industry and a compliant NRC seem to have a lead foot, ignoring the
danger signs.”

WHAT IS SOUTHERN
COMPANY HIDING FROM TAXPAYERS?

In November 2011, Southern Company admitted that the Vogtle the project is facing a
five-month delay because of problems with design approval and licensing by the
U.S. Nuclear Regulatory Commission.

But Southern Company has
gone to great lengths to censor and keep from public view the report of the construction
monitor, Dr. William Jacobs. Far from just a five-month delay, Jacobs has
warned that the problems at Vogtle go much deeper, that many of the
difficulties have persisted despite repeated attempts at resolution, and that
various parties are already squabbling over who pays for the many changes.

…
construction activities at the site are generally progressing well. However, as described in more detail later in
this testimony, the Project faces
significant challenges in achieving commercial operation of Unit 3 in April
2016 and of completing the project within the certified cost.

While it
is possible that some of the current delay can be recovered through schedule
compression, I pointed out in my prior testimony that the Consortium has failed to meet many of the schedule milestones to
date and this trend has continued.

… Given
the first time nature of the Vogtle 3 and 4 Project, a significantly compressed
schedule could result in, among other risks, significant additional cost to
staff extra shifts of construction, support and oversight personnel,
inefficiencies due to working additional shifts with lower productivity,
congestion and unplanned overlap of construction activities, additional rework, and additional
regulatory oversight due to increased QA [Quality Assurance] issues.

… the Company continues to face significant challenges in
maintaining the Project forecast at or below the certified amount. A possible schedule delay as
discussed above would impact the financing cost of the Project. In addition, the Company’s forecast does not
include many potential change orders that could significantly impact the direct
construction cost of the Project.

The Company has made little progress in resolving the potential
changes in the six months since my last testimony.

Some of these potential
change orders could have a significant impact on the Project cost. The forecast cost provided in the
Company’s testimony does not include the possible cost impact of these
potential change notices. Until the
magnitude of the costs associated with these potential change orders and the
responsibility for these costs is known, the
forecast cost for the Project is uncertain.

… The cause for Project delays, the responsibility for the delays
and the cost of the delays need to be resolved before all parties can agree on
a schedule.

(Emphasis added to the above passages.)

Southern
Co. has already commenced construction activities at the Vogtle reactor site,
with cost overruns already documented in a manner that should give pause to
U.S. taxpayers on the hook for Solyndra-style federal loan guarantees. The
Vogtle license would allow Southern to commence construction of the
containment, reactor cooling systems, spent fuel storage pools, and other major
nuclear plant components. The organizations charge that these major structures
could change substantially if they are redesigned to take the lessons of the
Fukushima accident into account, and therefore continued construction of the
new Vogtle reactors could be wasting money and resources.